Business

Bank of America’s revenue declines as lending stalls

Bank of America reported a steeper than expected decline in revenue on Wednesday as meaningful loan growth continued to evade the second-largest US lender. 

The Charlotte-based bank has struggled to increase revenue since the Federal Reserve cut interest rates to near zero and fiscal and monetary stimulus programmes reduced appetite for new loans.

Total loans in the second quarter fell 12 per cent, driven by a 30 per cent slide in loans in its global banking division that caters to corporates.

Revenue fell 4 per cent from the same period a year ago to $21.5bn, less than the $21.8bn expected by analysts, according to FactSet figures.

Profit was boosted by $2.2bn in loan loss reserve releases, reflecting an improved macroeconomic outlook. That offset lower revenue and a 12 per cent increase in operating expenses.

Overall the Charlotte-based bank reported earnings of $9.2bn, or $1.03 per share, compared to earnings of $3.5bn, or 37 cents per share in the same period last year. Analysts polled by FactSet were expecting earnings of 77 cents a share.

Shares in Bank of America fell more than 2 per cent to $39.01 during premarket trading.


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